New Survey: Wages Rising or Holding Steady as Labor Pressures Mount

35% of Businesses Expect Wage Increases; No Cuts Expected

In Santa Fe Springs and Covina, California, just outside Los Angeles, workers are in short supply.

“There is a severe shortage of workers at every level,” said Anne Woods, owner of Express Employment Professionals franchise offices in both communities. “It is being felt most keenly at the entry level, particularly in manufacturing and distribution.”

Such a labor shortage tends to cause upward pressure on wages, but, according to Woods, other factors are countering that effect, including “the effect of trade tariffs” and the “volatile stock market.”

At this point, Woods said she’s not sure which force will prevail.

In Ontario, Express franchise owners are also experiencing the effects of a tight labor market.

“We are definitely experiencing a tight labor market, and demand for quality workers exceeds supply across all sectors,” said Ted Maksimowski, an Express Employment Professionals franchise owner in Hamilton, Burlington, and Brantford, Ontario.  “Increased wages caused by the tight labor market, combined with legislated minimum wage increases in Ontario, will most certainly lead to higher wage increases than we have seen in previous years.”

He predicts businesses will continue to see labor cost increases.

“To get and keep quality workers, business owners are going to have to adjust to the new reality in which talent is king,” Maksimowski said.

 

In Grand Rapids, Michigan, local Express franchise marketing director David Robb sees similar trends.

“We’ve seen wages gradually increasing for over a year, especially on the lower end of the spectrum,” he said. “We expect this trend to continue as more and more companies try to compete for a small pool of talent.”

The same is true on the north side of Indianapolis, according to Express franchise owner Lee Wenninger.

“The prevailing mood that the economy is doing well has loosened businesses’ purse strings, so they are expanding and investing and as a result, need more employees,” he said. “This puts pressure on wages.”

While local circumstances may vary, there is one thing virtually all business agree on: wages are not going down.

According to the most recent survey of businesses fielded by Express, owners expect their wages to rise or stay the same in the third quarter of 2018.

  • 65% expect wages to the stay the same
  • 35% expect wages to increase
  • 0% expect wages to decrease

 

The survey of 439 businesses, which are current and former clients of Express Employment Professionals, was conducted in May 2018 to gauge respondents’ expectations for the third quarter of 2018.

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